Correlation Between Austevoll Seafood and Southwest Airlines
Can any of the company-specific risk be diversified away by investing in both Austevoll Seafood and Southwest Airlines at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Austevoll Seafood and Southwest Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austevoll Seafood ASA and Southwest Airlines Co, you can compare the effects of market volatilities on Austevoll Seafood and Southwest Airlines and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Austevoll Seafood with a short position of Southwest Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austevoll Seafood and Southwest Airlines.
Diversification Opportunities for Austevoll Seafood and Southwest Airlines
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Austevoll and Southwest is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Austevoll Seafood ASA and Southwest Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwest Airlines and Austevoll Seafood is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Austevoll Seafood ASA are associated (or correlated) with Southwest Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southwest Airlines has no effect on the direction of Austevoll Seafood i.e., Austevoll Seafood and Southwest Airlines go up and down completely randomly.
Pair Corralation between Austevoll Seafood and Southwest Airlines
Assuming the 90 days trading horizon Austevoll Seafood ASA is expected to generate 0.64 times more return on investment than Southwest Airlines. However, Austevoll Seafood ASA is 1.56 times less risky than Southwest Airlines. It trades about 0.07 of its potential returns per unit of risk. Southwest Airlines Co is currently generating about 0.01 per unit of risk. If you would invest 7,198 in Austevoll Seafood ASA on September 12, 2024 and sell it today you would earn a total of 2,747 from holding Austevoll Seafood ASA or generate 38.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Austevoll Seafood ASA vs. Southwest Airlines Co
Performance |
| Timeline |
| Austevoll Seafood ASA |
| Southwest Airlines |
Austevoll Seafood and Southwest Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austevoll Seafood and Southwest Airlines
The main advantage of trading using opposite Austevoll Seafood and Southwest Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austevoll Seafood position performs unexpectedly, Southwest Airlines can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Southwest Airlines will offset losses from the drop in Southwest Airlines' long position.| Austevoll Seafood vs. Hong Kong Land | Austevoll Seafood vs. Neometals | Austevoll Seafood vs. Coor Service Management | Austevoll Seafood vs. Fidelity Sustainable USD |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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